Do It Best To Acquire True Value
Hardware retailer True Value has entered into an agreement to sell substantially all of the company's business operations to home improvement industry peer Do it Best Corp.
To complete the sale efficiently, True Value and certain of its affiliates initiated voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware. True Value will continue its day-to-day operations serving 4,500 independently owned retailers.
"After a thorough evaluation of strategic alternatives, we determined that the sale of our business was the path forward to maximize value and best serve our retail partners and other stakeholders into the future," said Chris Kempa, True Value's chief executive officer. "We believe that entering the process with an agreed offer from Do it Best, which has a similar decades-long history in the home improvement space and also operates with a focus on supporting members and helping them grow, is the most beneficial next step for True Value and our associates, customers, and vendor partners."
"A successful acquisition of True Value assets would represent a strategic milestone for Do it Best and home improvement retailers around the world," said Dan Starr, Do it Best president & CEO. "Do it Best has a proven track record of driving profitability through the most efficient operations in the industry. This acquisition, if consummated, would provide True Value and independent hardware stores the strongest opportunities for growth for years to come."
The agreement with Do it Best provides significant cash consideration and meaningful assumption of liabilities related to the ongoing business. The company is requesting designation of Do it Best as the "stalking horse," or lead, bidder and to initiate a competitive bidding process under Section 363 of the Bankruptcy Code designed to achieve the highest or otherwise best value for the Company.
To support the day-to-day business through the sale, the company is seeking to use its cash collateral to fund operations. To the extent True Value requires additional financing during the process, the company has received a commitment from Do it Best to provide incremental capital.
The company is also filing with the court a series of customary motions seeking to uphold its commitments to its stakeholders during the process. These "first-day" motions include requests to continue to pay wages and provide benefits to associates in the ordinary course and offer essential customer programs. The Company anticipates paying vendors in the ordinary course for authorized goods received and services rendered after the filing.
The company is targeting completion of the sale process by year-end.
True Value stores are independently owned and are not a part of the Chapter 11 proceedings, except for one company-owned store in Palatine, IL.
